Strategy and Environment Final Individual Assignment

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is a resource-based view of the firm?

A resource-based view of the firm is an approach that focuses on a company's internal resources and capabilities to determine its competitive advantage.

What is a distinctive competency?

A distinctive competency is a combination of resources and capabilities that allows a company to outperform its competitors in a particular area.

What are the four elements of the VRIO framework?

Value, Replication, Imitability, Organization

Value, Resources, Imitability, Organization

Value, Rarity, Imitability, Organization (correct)

Value, Rarity, Innovation, Organization

A resource is considered valuable if it provides a company with a competitive advantage over its rivals.

True Signup and view all the answers

A resource is considered rare if it is widely available to all competitors.

False Signup and view all the answers

Which of the following is NOT a factor that makes a resource difficult to imitate?

Transparency Signup and view all the answers

What is tacit knowledge?

Tacit knowledge is the kind of knowledge that is difficult to articulate or codify. It is often learned through experience and is difficult to transfer to others. Signup and view all the answers

What are the three main ways a corporation can gain access to a distinctive competency?

A corporation can gain access to a distinctive competency through asset endowment, resource accumulation, or a combination of both. Signup and view all the answers

Which of the following is NOT a common business model?

Social Signup and view all the answers

What are the five elements of a business model?

The five elements of business models are: what it provides, how it makes money, how it differentiates its products/services, how it provides its products/services, and its customer value proposition. Signup and view all the answers

What is value chain analysis?

Value chain analysis is a technique for examining the activities that a company undertakes to create value for its customers. It helps to identify areas where the company can create or capture value, as well as areas where it can improve efficiency. Signup and view all the answers

What are the three main competitive advantages that a company can achieve?

The three main competitive advantages are cost leadership, differentiation, and focus. Signup and view all the answers

What are the four main types of corporate structure?

The four main types of corporate structure are simple, functional, divisional, and conglomerate. Signup and view all the answers

What is corporate culture?

Corporate culture refers to the shared values, beliefs, and norms that guide the company's behavior and decisions. It can have a profound impact on the company's performance. Signup and view all the answers

What are the four main benefits of corporate culture?

The four main benefits of corporate culture are: it helps generate employee commitment, it serves as a frame of reference, it adds to the stability, it contributes to the effectiveness. Signup and view all the answers

What is a marketing mix?

A marketing mix refers to the combination of controllable marketing variables that a company uses to achieve its strategic marketing objectives. The four key elements of marketing mix are: product, price, promotion and place. Signup and view all the answers

What is the strategic task of the marketing manager?

The strategic task of the marketing manager is to identify the company's primary link to the customer and the market, which is the company's market position or segmentation. It involves understanding: who are the company's customers and what is their overall reputation in the marketplace. Signup and view all the answers

What is a brand?

A brand is a name given to a company's product which embodies all of the characteristics of that item in the mind of the consumer over time and with effective advertising and marketing efforts. Signup and view all the answers

Study Notes

Organizational Analysis and Competitive Advantage

Environmental scanning involves gathering information about external factors such as the natural environment, societal environment, and the task environment.
Strategy formulation involves developing long-range plans, including mission, objectives, strategies, policies, programs, budgets, and procedures.
Strategy implementation involves putting the strategy into action, including specific activities and procedures needed for plan accomplishment.
Evaluation and control involves monitoring performance throughout implementation to identify opportunities for improvement and make necessary adjustments.
Internal factors include organizational structure, culture, resources, and competencies.
External factors include the natural environment, societal environment, and the task environment among others.
Core competencies are valuable, rare, inimitable, and organized resources that provide a competitive advantage.

Understanding Capabilities—Bombardier and the C-Series Aircraft

Bombardier, founded in 1942, began as a snowmobile company and later diversified into transportation and aerospace.
Key acquisitions, like Canadair and Learjet, expanded into the aerospace industry.
The company's CRJ regional aircraft are a notable product.
Bombardier attempted a market entry into the single-aisle wide-body jet market in 2008.
The C-Series faced numerous delays and missteps, including a failure to adequately secure orders for the aircraft.

A Resource-Based Approach to Organizational analysis-Vrio

Analyzing the external environment for opportunities and threats is essential.
Internal scanning identifies crucial strengths and weaknesses.
Resources include tangible (plant, equipment, finances, location), human, and intangible assets (technology, culture).
Capabilities are the abilities to use resources effectively.
Competencies are cross-functional integrations to maximize resource use.
Dynamic capabilities adjust to maintain responsiveness to change.
A VRIO framework (Valuable, Rare, Imitatable, and Organized) assesses competitive advantages.

Profit Pyramid Model

Offers a full line of automobiles aiming to draw customers up from lower-priced models to higher-margin, more profitable models.
Manufacturer strategically uses lower price points to acquire customers and subsequently increase profitability on higher-end products.

Multicomponent System

Products are sold at a low price to ensure customer acquisition and maximize returns on complementary products (such as accessories, parts, or services).
This model is primarily utilized in razor-and-blade or printer-and-inkjet industries.

Advertising Model

The basic product is offered free, attracting customers and driving up revenue from associated products/services.
Companies utilizing this strategy include free streaming services or online encyclopedias.

Switchboard Model

Businesses serve as intermediaries to link buyers and sellers, generating a profit from the transactions.
Financial advisors and online marketplaces like eBay and Amazon operate on the switchboard model.

Time Model

Based on the idea that the first company to market with a new innovation can achieve significant returns, as the competition catches up, leading to higher profits.
Google, due to early innovation, has often maintained this strategy with its various products.

Efficiency Model

Companies that offer low-priced products in mature markets or where the market leader established standardization can gain a cost advantage.
Cost-effective and easily produced items are offered in the marketplace as a response to mass market need.
Kias and Spirit Airlines demonstrate this strategy.

Blockbuster Model

Favored in industries where a minority of products are responsible for most of the firm's revenue and profitability.
High investment and marketing efforts concentrate on a limited number of products often with patent protection.
Pharma companies often demonstrate this model where several products often dominate.

Profit Multiplier Model

The idea of a product or service that might not be profitable on its own but that generates profit through leveraging synergy/synergistic effects, allows many product and service expansions.
Walt Disney capitalized on this approach.

Entrepreneurial Model

Targeting small, less-competitive market niches is favored for this business model, as profitable market niches are often disregarded by large corporations.
Local brew pubs represent a segment of the industry that demonstrate this model.

De Facto Industry Standard Model

Firms offer low-cost, essential products to become the de facto industry standard;
Once this position is reached, the company then offers higher-profit products depending on the acceptance/adoption rate in the marketplace

Value-Chain Analysis

A linked set of value-creating activities composing a firm's operations, ranging from raw material procurement to final distribution and sales.
Analyzing each aspect of the value chain within an industry and within a specific firm assists in understanding each firm's competitive position and ability to execute and implement plans.

Corporate Value-Chain Analysis

This is an internal value chain, including various functional areas.
It helps in analyzing a corporation's strengths and weaknesses.
Analyzing the value chain of each product line/service is more relevant than the overall corporate performance. This analysis assesses a company's strengths and identifies critical areas for improvement to better perform in the market.

Basic Organizational Structures

Simple structure (small, entrepreneurial companies)
Functional structure (medium-sized firms with multiple product lines), and
Divisional structure (large corporations with diverse product lines and industries).

Corporate Culture

Corporate culture is the beliefs, expectations, and values shared by employees.
Cultural intensity is the degree to which these values are widely accepted.
Cultural integration is the extent to which these values are shared across divisions.
Cultural intensity and integration have a significant effect on employee behavior.

Managing Corporate Culture

Consistent behavior is essential in a strong culture.
Organizational intensity and integration influence a company's performance.
Cultural conflicts/misalignments can negatively affect a firm, particularly through acquisitions or merging of various entities
Understanding the organizational culture is essential in evaluating its influence on the firm's strategic direction

Strategic Financial Issues

Financial managers must manage funds across various financial instruments.
Cash flow, currency risks (especially in multinational companies), and financial leverage are critical.
The debt-to-assets ratio is used to assess risk.
Capital budget analysis evaluates investments in fixed assets.
Financial performance is intimately connected to overall strategy.

Strategic Research and Development (R&D) Issues

R&D intensity, technological competence & transfer processes determine the success of a company in various industries
Core competencies act as a foundation for successful R&D processes.
A company's R&D expenditure and internal competencies reflect the types of product innovations pursued.
Technology Transfer helps in commercializing R&D discoveries.
The VRIO Framework guides an analysis of firm capabilities, helping to evaluate the strengths and positions of existing R&D operations.

Strategic Operations Issues

Manufacturing systems can be intermittent (job shops) or continuous (assembly lines).
Operating leverage is how a specific change in sales volume impacts operating income.
The experience curve is used to determine how costs decrease with increasing production volume.

Using Resources/Capabilities for Competitive Advantage

A company can gain access to a distinctive competency through four methods:

Asset endowment (key patents).
Acquisition from other firms.
Shared with another individual/company.
Accumulated over time within the organization.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.